On Nov. 2, CA (NYSE:CA) -- the former Computer Associates -- released third-quarter earnings for the period ended Sept. 30. The stock slumped upwards of 10% on the report.

  • Revenues for the software maker grew 4.8% to $996 million. That was thanks largely to growth in subscription and professional services, but declines in maintenance and software fees offset some of the gains.
  • Lower bookings and the associated billings seem to be the big factors affecting the stock price, as well as a plunge in free cash flow.
  • The earnings release coincided with the news that the company's former CEO, Sanjay Kumar, was sentenced to 12 years in prison for his role in a massive $2.2 billion accounting fraud in the early 2000s.
  • Our Motley Fool CAPS players have no confidence in the future of the stock, assigning it a meager one-star rating.

(Figures in millions, except per-share data)

Income Statement Highlights

Q3 2006

Q3 2005

Change

Sales

$996

$950

4.8%

Net Profit*

$53

$46

15.2%

EPS

$0.09

$0.08

12.5%

Diluted Shares

584

610

(4.3%)

*Net profit does not include income from discontinued operations

Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

No Data

No Data

No Data

Operating Margin

7.83%

6.00%

1.83

Net Margin

5.32%

4.84%

0.48

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$1,295

$1,640

(21%)

Accounts Rec.

$422

$371

13.7%

Inventory

N/A

N/A

N/A


Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

No Data

No Data

No Data

Long-Term Debt

$2,577

$1,810

42.4%



Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2006

YTD 2005

Change

Cash From Ops.

$6

$299

(98%)

Capital Expenditures*

$47

$47

0%

Free Cash Flow

($41)

$252

N/A

*Includes software development costs.

Find out why Fools always follow the money.

Related companies:

  • BMC Software (NYSE:BMC)
  • EMC (NYSE:EMC)
  • Adobe Systems (NASDAQ:ADBE)
  • Sybase (NYSE:SY)

Related Foolishness:

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